I am an Associate Professor in the School of Accountancy and MIS at DePaul University in Chicago, IL. My passion is white-collar crime. My research has been published in such journals as Behavioral Research in Accounting, Auditing: A Journal of Practice and Theory, Journal of Business Ethics, The CPA Journal and Journal of Accountancy. I am also the founder of Helios Digital Learning, Inc., an education media company that offers a suite of educational, consulting and training products and services designed to help organizations understand, identify and prevent fraud. My first white-collar crime documentary, Crossing the Line: Ordinary People Committing Extraordinary Crime, was a 2012 recipient of the American Accounting Association Ethics Committee’s Teaching Award and a recipient of the 2012 Mark Chain/FSA Teaching Innovation Award sponsored by the AICPA. In my free time, I enjoy doing crossfit and half-marathons.

11/13/2012 @ 10:42PM1,123 views

Rita's Countdown to Court

In less that 24 hours from now former Dixon, IL comptroller Rita Crundwell will plead guilty of embezzling approximately $53 million making her the ‘queen of municipal fraud’ in the United States. I have watched this case closely since April 2012 whether it be attending court and seeing Rita in person or attending the horse auction at her Dixon, IL ranch or one of the most memorable trips was accompanying the U.S. Marshal service to Tampa, Florida to view her Florida getaway vacation home. Unfortunately, I will not be able to attend tomorrow’s hearing, but I can’t stop but wondering ‘what is Rita doing tonight?’

Is she spending her evening with her public defenders practicing how she will utter the words ‘guilty’ in front of Senior U.S. District Judge Phillip G. Reinhard or is she spending a quiet evening home with her partner at her Beloit, WS ranch. Is she spending her evening with her family or is she all alone, beginning to prepare herself for the next chapter of this case.

As I begin to stop and think deeply about what Rita is doing tonight, I started to wonder what court will be like tomorrow morning. She is scheduled to appear at 9am in the Rockford, IL federal court. The last couple of court appearances I attended were pretty uneventful. You can imagine how distraught I am that I will miss one of the most important court appearances of the Crundwell case. I started to wonder what happens when a person pleads guilty to a crime. According to some quick research I did to understand the process, when a person pleads guilty, the rest of the legal process is pretty straightforward. Rita’s next court appearance should be for her sentencing and then she should report to prison (assuming that the judge hands down a lengthy prison sentence).

Now, based on my research and experience producing my white-collar crime documentary, Crossing the Line: Ordinary People Committing Extraordinary Crimes the time period between being convicted and sentencing can span over a years time. Garrett Bauer, one of the white-collar offenders that I interviewed for my documentary, spent a little over a year as a free man while he was awaiting sentencing. He spent a large portion of his day volunteering his time and speaking to college student group about his crime in hopes that the judge would have some leniency at sentencing. (Garrett’s plan did not work and he is currently serving a 9-year sentence in federal prison for insider trading.)

I wonder how long Rita’s time frame will be between conviction and sentencing. If you take for example Mark Dreier, former New York-based multi-millionaire attorney who is currently serving a 20-year sentence for securities fraud, wire fraud and money laundering, he spent this time filming the documentary Unraveled directed by Marc H. Simon. The 8-week filming of the documentary was done while Dreier was on house arrest prior to his arrival to federal prison. Do you think I could be so lucky as to score an interview with Rita?

Although I would love to have the opportunity to speak with Rita, I doubt very seriously that she would contact me. I really wish she would because I do think many people what to know what motivated her to steal from her hometown for so many years. If I could speak to Rita, I would ask her ‘what caused you to cross the line? Was it financial pressure or was it simply because you could?’As many of the Dixon residents reflected on the fraud case during man-on-the-street interviews I conducted, they all left the conversation stating that ‘Rita was the last person we would ever imagine that could do something like this.’ Famous last words from many victims of fraud.

When you look at the characteristics of the largest embezzlement cases from 2011, Rita’s case fits nicely within the profile. Citing data taken from the The 2011 Marquet Report on Embezzlement reveals the following:

Non-profits and religious organizations combined accounted for about one-sixth of all the major embezzlement incidents in the 2011 study;

Nearly three-quarters of the incidents (72.3%) were committed by employees who held finance/ bookkeeping & accounting positions;

The average scheme lasted nearly 5 years;

The most common embezzlement scheme involved the issuance of forged or unauthorized company checks;

5% of the cases involved perpetrators who had a prior criminal history;

The average embezzler in this study stole $15,189 per month from their employer;

The average adjusted age** of perpetrators at the commencement of their embezzlement was just under 43 years;

Most major embezzlers appear to have been motivated by a desire to live a relatively more lavish lifestyle, rather than driven by financial woes; and,

The average prison sentence was 4 1/3 years (52 months) for convicted major embezzlers.

Some of the characteristics are exactly the profile of your typical embezzler and the profile of the Crundwell case and other characteristics are not. For example, Rita’s alleged embezzlement lasted over a 20 year period and not nearly 5 years as was indicated by the research study. Additionally, the average prison sentence was 52 months and if we use the largest municipal fraud prior to Rita as a proxy, Rita should be looking at a much longer prison sentence than 4 1/3 years. Harriette Walters, former tax assessment manager for the District of Columbia is currently serving an 17-year prison sentence for orchestrating a $48 million fraud scheme over a 20 year period within the District of Columbia government.

The next chapter of the Crundwell case should be interesting. Unfortunately, I will miss the activities of tomorrow, but I am sure there is more to come. Countdown to court begins now!

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